City continues ferrochrome plant pitch

The provincial government’s announcement that paves the way for an all-year road to be created to the Ring of Fire region also means several Northern Ontario communities will step-up their game to have a ferrochrome facility established in their community.

Mayor Christian Provenzano said he’s met twice with representatives of NorOnt to push Sault Ste. Marie’s attributes to house a ferrochrome plant.

“Both times NorOnt came to the Sault they told me their priority was the road,” Provenzano said. “I asked how to help and they told me to lobby for the road so I did that.”

The Sault Ste. Marie Economic Development Corp. has also been keeping in close contact with NorOnt Resources and has been gathering the data and information it believes will be required for its request for proposal submission.

In addition, NOLAN also lobbied collectively for the importance of the road, considering the vast impact the development could have on the region’s economy.

Ontario Premier Kathleen Wynne announced on Aug. 21 that an agreement has been reached with three First Nation communities closest to the mineral deposit site and that environmental work would begin with road construction expected to begin in 2019. The road will allow year-round access to the remote mineral deposit, believed to be the largest of its kind.

Provenzano is to talk again in the coming days with NorOnt officials to determine what the next steps are and how he can assist with moving the project forward.

He’s willing to connect NorOnt executive with the term lenders in order for them to engage in their own conversations.

“I’m sure NorOnt is going to find a cooperative and collaborative business partner there to enter into negotiations or discussions,” he said.

Alan Coutts, president and CEO of NorOnt Resources, could not be reached Tuesday for comment.

Dan Hollingsworth, executive director of business development at the Sault Ste. Marie Economic Development Corp. said the EDC is maintaining close contact with the NorOnt.

The RFP package for the ferrochrome facility has yet to be released but Hollingsworth said preparing for it.

“We are waiting on the bid package to understand how we present the case for Sault Ste. Marie. We expect that it will be distributed to the communities in the fall,” he said.

It was originally anticipated that the packages would have been released already, with a decision to be made by the end of the summer. Reports now indicate the decision has been pushed back to year end.

With Sault Ste. Marie’s major employer, Algoma, still under Companies Creditors’ Arrangement Act protection, there is some suggestion that NorOnt may look elsewhere for a ferrochrome facility.

But Provenzano argues against that.

“In dealing with Algoma and the term lenders, I’ve spoken directly to them about the importance of this project in economic development in Sault Ste. Marie and they’ve committed to us to work with economic development initiatives, including this one,” he said.

The first-term mayor said the term lenders are interested in the project and see potential synergies that can be created if Sault Ste. Marie is successful in its bid to host the ferrochrome plant.

“I’ve got that commitment from the term lenders. I’m not concerned about that coming to pass,” he said.

Provenzano said any operator of Algoma will want to create a plan with NorOnt if a ferrochrome facility is established on those lands – to create revenue and share expenses there.

“NorOnt and Algoma are sophisticated business parties and generally speaking, private sector parties, when they have common interests, act in those interests,” he said. “I don’t see this as a big hill to get over. We just have to come out of this CCAA process.”

Algoma is approaching its second year is CCAA and even the courts have been pushing to get Algoma back on its feet.

NorOnt has been touring brownfield sites in Sudbury Fort William First Nation and Timmins. The potential Sault Ste. Marie site is on Algoma property, in close proximity to the steelmaker and the Port of Algoma.

A ferrochrome facility ultimately prepares and transforms the chromite ore deposits to ferrochrome, the product used to create stainless steel products.

Ferrochrome is crated with iron, chrome and oxygen. The high-grade chromite ore taken from the Ring of Fire area is grinded and put through a processing plant that requires high levels of energy to melt the ore and add carbon to separate the oxygen from the iron and chrome. The completed iron and chrome project is called ferrochrome.

It’s expected the plant would require 100 to 130 mW of power to operate a plant. Any lands would need to be properly designated for heavy industrial use and an array of other planning and environmental requirements would also need to be met.

The final product would be exported to the industrial regions in the Northeast United States, such as Ohio and Pennsylvania, to make stainless steel. Currently companies there get their ferrochrome from South Africa and Pakistan.

NorOnt has said it needs the road before it can move forward with its operations.

Its first plan – estimated to begin in about five years -- is to mine the Eagle’s Nest nickel/copper/platinum deposit and process the materials in Sudbury.

Mining at the chromite deposit will begin shortly after that.

Sault Ste. Marie’s advantages include available heavy industrial-zoned land, its proximity to transportation networks and its skilled workforce.

A ferrochrome plant – the first of its kind in North America -- is estimated at $1 billion.

NorOnt Resources is a Canadian-based mining company and has the largest land position in the Ring of Fire. It has ownership or a controlling interest in all the major discoveries to date in the region.